Editorial | UPS and health plans

Aug. 22, 2013

United Parcel Service, one of the country’s biggest employers, created a stir this week through reports that it plans to drop health insurance coverage for spouses of white-collar employees if those spouses are eligible for coverage through their own employers.

While the news may come as a surprise to workers at “Big Brown,” known for its generous benefits including health coverage, it’s not a particularly surprising trend in the workplace where more employers are prodding employees whose spouses can get coverage elsewhere to do so.

UPS, the world’s largest package delivery company whose Worldport air hub is based in Louisville, suggested to the employees the change was prompted by the Affordable Care Act, or Obamacare, according to a memo to employees first reported by Kaiser Health News and USA Today.

“Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer — just as UPS has a responsibility to offer coverage to you, our employee,” it said.

But before the critics of health care reform get too riled up, they should consider findings of the Kaiser-USA Today report that noted other companies have taken similar steps — unrelated to health reform — as employers seek to curb health care costs.

Well before the Affordable Care Act was enacted in 2010, employers had begun efforts to cuts costs by getting spouses off the plan if the spouse had health coverage available elsewhere.

Some employers offer workers a bonus if spouses obtain separate coverage through an employer. Others charge an annual surcharge to employees who add working spouses to their plan.

Xerox charges employees a $1,000 annual penalty if they add spouses who could obtain coverage through an employer and that increases to $1,500 next year.

And some cities have begun excluding spouses.

Covering spouses dates back to the 1950s when far fewer women worked outside the home. It’s not the 1950s anymore and the Affordable Care Act recognizes that by requiring far broader access to employee health coverage.